Five Brexit scenarios that HR teams can plan for now

Although the precise details of UK immigration and employment law are still to be determined, there’s plenty that HR teams can do now to support EU-national staff

With the immigration terms of the Brexit transition period recently agreed between the UK and EU, employers and HR teams are now able to start planning for the five employment scenarios that might affect their workers, said Tom Bradford, partner at Freeths, during a CIPHR webinar earlier this month.

Three stages of Brexit

As far as immigration law is concerned, there are three stages to the Brexit process, explained Bradford:

Pre-Brexit – from now until exit day, 29 March 2019

Transition – from 29 March 2019 until 31 December 2020

Post-Brexit – from 1 January 2021 onwards

Changes to immigration law will affect the more than three million EU-nationals who currently live in the UK – all of whom will be required to apply for new immigration status documents. Those who don’t apply by the end of the transition period will be staying in the UK unlawfully, said Bradford. HR teams that don’t put the right steps in place and obtain the right documents that prove EU nationals’ right to live and work in the UK will be at risk, with statutory penalties of £20,000 per worker, and possible criminal sanctions, he added.

How UK immigration law currently works

All EU nationals can currently reside in the UK for up to three months with no restrictions. They may then reside for up to another five years if they meet certain criteria (such as if they are employed, self-employed, or are the family member of another eligible EU citizen). After year five they achieve the right of permanent residence, and then, in the sixth year, they can choose to naturalise as a British citizen.

Scenarios HR can plan for now

Changes to immigration law will affect EU nationals, and their employers, in five different ways. To ensure you can retain, legally employ, and continue to recruit EU nationals, HR needs to start planning for these scenarios now, said Bradford, and consider how actively they wish to support their affected staff.

Scenario 1: person arrived in the UK before 29 March 2019, and has been in the UK for five or more years

At some point in 2018 – likely in the autumn – the government will open a new route for EU nationals who arrived in the UK before 29 March 2019, and have been in the UK for five or more years, to voluntarily apply for ‘settled status’.

After 31 December 2020, it will be mandatory for such EU nationals to apply for settled status. If they don’t, they will have overstayed and, if still working, their employer will be subject to a statutory penalty. “Businesses who are employing such workers could be caught out if they haven’t taken the right steps,” said Bradford.

Scenario 2: person arrived in the UK before 29 March 2019, and has been in the UK for four years

Because this person has not been in the UK for five years, and therefore has not gained the right of permanent residence, they cannot voluntarily apply for settled status using the route outlined in scenario 1. However, they will be able to stay in the UK for an additional year to accrue the necessary five years, and then voluntarily apply for settled status. After 31 December 2020, it becomes mandatory that they apply for settled status.

Scenario 3: person arrived in the UK before 29 March 2019, and has been in the UK for three or fewer years

This person cannot voluntarily apply for settled status during the Brexit transition period because they will only achieve the five years’ residency qualification after the transition period ends. After 31 December 2020 they must apply for a temporary residence document, and then apply for settled status when they reach the five-year residency threshold.

Scenario 4: person arrives in the UK after 29 March 2019, during the transition period

This person can stay in the UK for three months and must then register for a temporary residence permit. The length of time they will be able to stay may depend on their skills; it is likely that ‘low-skilled’ workers will be able to stay for two years, and ‘higher-skilled’ workers for three-to-five workers (these categories are yet to be defined). Employers’ ability to recruit EU workers may be restricted by a yet-to-be-confirmed system of worker categories similar to the existing Tier 2 visa system for non-EU-national workers.

Scenario 5: person arrives in the UK after the transition period ends on 31 December 2020

Because the new immigration system is still to be confirmed, the outcomes in this scenario are less clear. There may be restrictions on how long EU nationals can stay and work in the UK based on their skill levels. We may also see the introduction of sponsorship requirements similar to those required of employers who want to hire staff from non-EU countries.

Hear more from Tom Bradford, partner at Freeths, on what HR can expect after Brexit and how to support EU nationals during the transition period, in our on-demand webinar. Watch it here now